Denmark Finance Minis­ter’s Statement

Author: | Published: 19 Oct 2018
Email a friend

Please enter a maximum of 5 recipients. Use ; to separate more than one email address.

The global recession is finally being superseded by an economic upswing. To reap the full benefits of the upswing and to sustain it, we must allow continued global integration and trade. Globalization is beneficial for all our economies. It lowers prices and increases choices of products available. It brings us better technology allowing us to produce new and improved goods and services. Most importantly, it leads to a more efficient division of labour and higher productivity.

Many citizens are sceptical of whether globalisation is working and is fair for all. Some feel alienated and excluded from the gains – that the cards are stacked against them. They believe that globalization only benefits the selected few.

This is a serious concern – one we must address. We must convince our citizens that globalization really is beneficial for all of us. Efforts on many fronts are needed. We must provide quality education for our citizens and adequate training for our workers. This requires adequate tax revenues.

Fighting tax avoidance and evasion is therefore crucial. Not only to ensure sufficient revenues. Negative views of globalization are reinforced by incidences where companies and individuals are not in practice subject to the same tax rules as the rest of us but have found ways to pay significantly less in a world of loopholes between national systems.

Fortunately, a sustained and determined effort has been made both globally and in Europe to close loop holes and fight tax avoidance. The OECD has introduced minimum standards and further recommendations to fight Base Erosion and Profit Shifting (BEPS). The implementation of these standards has led to a global economy more resistant to aggressive tax planning and tax evasion. For example, the recent US tax reform implements several OECD BEPS-recommendations and the GILTI measure ends an era where US multinational companies including the tech giants could avoid, or indefinitely postpone, paying taxes on their foreign profits. In the European Union, we have adopted the Anti-Tax Avoidance Directive (ATAD), containing many strong anti-abuse rules.

We have also agreed no less than six Directives on Administrative Cooperation (DAC) ensuring, among other things, automatic exchange of information on financial accounts, tax rulings, country-by-country reports and beneficial ownership. Further the DAC's implement Common Reporting Standards (CRS) and mandatory disclosure rules for intermediaries. Lastly, we have agreed on a common list of non-cooperative tax jurisdictions outside the EU. In the process of drawing up the list, more than 60 countries have agreed to comply with the requirements and rules we also apply to ourselves within the EU.

This serves as a proof of the leverage we have when acting together and as a motivation to pursue further global measures together: we must stand ready to further refine and strengthen the initiatives and target new tax avoidance mechanisms whenever and wherever they may emerge. That is a cornerstone on which we can rebuild the trust of our citizens in fairness of globalization and replace scepticism with enthusiasm.